The Days of ‘Sleepy’ Funding Markets at Quarter-End Are Over
- Primary dealer holdings of Treasuries are near all-time high
- Markets no longer awash in excess liquidity: TD’s Goldberg
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The whipsawing of rates in the market for repurchase agreements suggests that the collapse in funding costs seen earlier in the year has come to an end.
Funding rates — the cost of financing holdings of Treasuries — typically march higher at the end of the quarter as banks rein in lending. But the return of volatility is on the radar of market participants.